At a level of output equal to the economy's potential,the simple spending multiplier in the long run equals one.

Name: At a level of output equal to the economy's potential,the simple spending multiplier in the long run equals one.
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In the long run, the simple spending multiplier is considered to be zero because prices and wages adjust to changes in demand, negating the effect of initial spending changes on the overall level of output.

At a Level of Output Equal to the Economy's Potential,the